HELENA Z. T. BENITEZ, PETITIONER-APPELLEE, VS. THE INTERMEDIATE APPELLATE COURT, ROSARIO R. VELOSO, IN HER CAPACITY AS JUDGE OF THE REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICI…

This is a petition for
review on certiorari of the decision of respondent Intermediate
Appellate Court dated July 25, 1985, affirming the questioned orders of the
Regional Trial Court of Makati, to wit:  (a) the order dated December 11, 1984,
granting the private respondents’ petition for a writ of attachment ex-parte; (b) the order dated January 31, 1985, denying
petitioner’s urgent motion to discharge attachment; and (c) the order dated
April 24, 1985, denying petitioner’s motion for reconsideration.

The records show that on December
6, 1984, private
respondent Casa Filipina Development Corporation (Casa Filipina for brevity) filed
a complaint against herein petitioner Helena T. Benitez for recission
of contract, plus damages, with a prayer for preliminary attachment.  The complaint alleged that sometime on April
16, 1983, the plaintiff Casa Filipina, a real estate corporation, represented
by Renato P. Dragon, and defendant Benitez (the
petitioner herein), entered into a verbal contract whereby Benitez allegedly
agreed to undertake to purchase/convey land for Casa Filipina in the total
value of One Million Pesos (P1,000,000.00) within the period of four (4) months
from receipt of the total amount.  On the
same date, Casa Filipina tendered a check payment in the amount of Five Hundred
Thousand Pesos (P500,000.00) in the name of Benitez.  On August
26, 1983, to complete the amount of One Million Pesos as allegedly
agreed upon, Casa Filipina issued again another check in the amount of Five
Hundred Thousand Pesos (P500,000.00). 
Both checks were deposited and credited in petitioner’s bank
account.  The four-month period allegedly
elapsed without Benitez having purchased nor conveyed any real estate in the
total value of One Million Pesos (P1,000,000.00) in favor of Casa Filipina, but
instead Benitez converted the entrusted money for her own personal use in
violation of her fiduciary relationship with plaintiff and that despite
repeated demands for the refund or return of the aforementioned amount, Benitez
chose to ignore the same.  Praying for a
writ of preliminary
attachment, Casa Filipina submitted with its complaint, the affidavit of one Nestor
P. Borromeo, the corporate secretary and acting
treasurer of the corporation.

The writ of attachment
was granted by respondent court ex-parte in an order
dated December 11, 1985.

On December 27, 1984, the Clerk of Court issued a writ of
preliminary attachment, by virtue of which the respondent Sheriff served
notices of garnishment to the Philippine Women’s University, Taft Avenue,
Manila, the Unlad Development Resources Corporation
and Bank of the Philippine Islands, Unlad
Condominium, Taft Avenue, Manila, thereby garnishing the deposits, shares of
stocks, salaries and other personal property of the petitioner.  Likewise, on January 30, 1984, petitioner was advised by the Acting
Register of Deeds of Quezon City that a notice of
levy was filed with the Registrar’s Office affecting two parcels of prime land
at Mariposa Street, with an
aggregate area of 4,304 square meters which are owned by and registered in the
name of the petitioner.

Earlier on January 21,
1985, Benitez filed an answer with counterclaim and opposition to
the petition for issuance of a writ of
preliminary attachment.  On the same
date, Benitez also filed an Urgent Motion to Discharge Writ of Preliminary
Attachment under Section 13, Rule 57 of the Rules of Court, on the ground that
the same was improperly or irregularly issued. 
Benitez alleged that sometime in March 1983, Mr. Renato Dragon, acting for himself and Casa Filipina agreed to buy ten (10) hectares of
petitioner’s land in Dasmarinas, Cavite
for a price of P15.00 per square meter or for a total consideration of One
Million Five Hundred Thousand Pesos (P1,500,000.00); that it was agreed upon by
the parties that it is only upon
full payment of the amount of
P1,500,000.00 that delivery of the ten-hectare property of the petitioner will be made; that Casa
Filipina was not able to comply with the obligation to pay the balance of
P500,000.00 despite repeated demands
and instead filed the present action for recission.

In support of its urgent
motion to discharge the writ of preliminary attachment, petitioner attached
thereto the affidavit of her technical assistant and attorney-in-fact by the
name of Virginia Real, who alleged, among other things, that she knows for a
fact that the transaction between Benitez and Dragon or Casa Filipina, was one
of purchase and sale; that a copy of TCT No. 9833 covering the land to be
purchased was furnished the office of Mr. Dragon on February 28, 1984; that
petitioner is willing and able to execute a deed of absolute sale in favor of Casa Filipina upon full payment
of the balance of P500,000.00.

The said motion was set
for hearing on January 25, 1985 but the private respondent and its counsel
failed to appear despite notice. 
Consequently, the motion was deemed submitted for resolution.

On January
31, 1985, respondent
Court denied petitioner’s motion to discharge writ of preliminary
attachment.  The said order reads:

“Considering defendant’s motion to quash and/or lift the writ
of preliminary attachment issued by this Court upon properties of defendant on the ground that the same
was
predicated upon false and untrue
allegations, the Court believes and so rules that the issue cannot be determined without adducing evidence at the same time going into
the merits of the case which in the opinion of the Court could not be done at
this stage of the proceedings.

Considering that the writ of preliminary attachment was issued
after having satisfied the requirements of the rules, the same may not be
lifted or discharged without the
defendant filing a counterbond.

WHEREFORE, the motion to lift and/or discharge the writ of preli­minary
attachment is hereby denied.

SO ORDERED.”

On February
5, 1985, despite the
lower court’s denial of petitioner’s motion to discharge preliminary attachment, the private respondent filed a belated
opposition to the said motion, to which the petitioner filed a reply on February
18, 1985.

On March
14, 1985, petitioner
discovered that her motion to discharge preliminary attachment was
denied.  Hence, on March
20, 1985, petitioner
filed a motion for reconsideration which was likewise denied by respondent
judge on April 24, 1985. 
Whereupon, a petition for certiorari, mandamus and
prohibition was filed by the petitioner before respondent Intermediate
Appellate Court, which, as stated earlier, was dismissed for lack of
merit.  Hence, this petition.

On January 8, 1986, the
Court gave due course to the petition and required the parties to submit their
memoranda.

Petitioner poses the
following questions for resolution, to wit:

1.      Whether
a counter-attachment bond is necessary and indispensable under the
circumstances before the subject writ of preliminary attachment may be
recalled, quashed and/or discharged?

2.      Whether
or not the issue on the pro­priety of the issuance of the subject writ may be
resolved without going into the merits
of the principal action?

 We find the petition meritorious.

The attachment was
granted by the lower court ex-parte under Section
1(b), Rule 57, Rules of Court, upon the allegation of respondent Casa Filipina,
that petitioner Helena Benitez, the defendant, had violated their alleged
fiduciary relationship and had unlawfully converted the amount of P1,000,000.00
for her own use.  Petitioner promptly
filed an urgent motion to discharge writ of preliminary attachment for improper
or irregular issuance, supported by the affidavit of Virginia Real, who alleged that there was no
fiduciary relationship between the plaintiff and defendant inasmuch as the
transaction between them was one of sale of real property.  Thus, in effect, the petitioner claims that
the private respondent’s allegation of fraud was false, that hence there was no
ground for the attachment, and that consequently, the attachment order was
improperly or irregularly issued.

In
Villongco, et al, vs. Hon. Panlilio,
et al.,^[1] we held that the affidavit supporting the
petition for the issuance of the preliminary attachment may have been
sufficient to justify the issuance of the preliminary writ, but
it cannot be considered as proof of the
allegations contained in the affidavit, which are mere conclusions of
law, not statement of facts.  Petitioner
in the instant case having squarely controverted the private respondent’s allegation of
fraud, it was incumbent on the latter to prove its allegation.  The burden of proving that there indeed was
fraud lies with the party making such allegation.  This finds support in Section 1, Rule 131 of the Rules of Court which provides:  “Each party must prove his own
affirmation allegations. 
x x x The
burden of proof lies on the party who would be defeated if no
evidence were given on either side.” In this jurisdiction, fraud is never
presumed.^[2]

The petitioner’s Urgent
Motion to Discharge Writ of Preliminary Attachment was filed under Section 13, Rule 57. 
The last sentence of said provision indicates that a hearing must be
conducted by the judge for the purpose of determining whether or not there
really was
a defect in the issuance of the
attachment.

It appears from the
records that no hearing was conducted by the lower court.  Indeed, when the case was called for hearing,
the plaintiff (private respondent herein) failed to appear
and the petitioner’s motion was considered submitted for resolution.

Private
respondent has alleged in its memorandum that petitioner did not file an affidavit in support of her Urgent
Motion to Discharge Attachment, as required under Section 13 of Rule
57, hence, it was not necessary or imperative that a hearing
be held.  The
Court finds private respondent’s
allegation to be irresponsible,
for attached to petitioner’s motion
was the supporting affidavit of Virginia L. Real,
the technical assistant of petitioner
Benitez.  In her affidavit, she stated that she had personal knowledge of the transaction between respondent Casa Filipina
and petitioner Benitez; that Mr. Renato Dragon, for
himself and/or Casa Filipina, agreed to buy a portion consisting of 10
hectares of a parcel of land belonging
to Benitez in Dasmarinas, Cavite,
for the total price of P1,500,000.00 of which private respondent made a downpayment
of P500,000.00 on April 16, 1983, and a second payment of P500,000.00 on August
27, 1983; that private respondent having failed to pay the balance of
P500,000.00, the deed of sale could not be executed in favor of private
respondent.  The record amply supports
petitioner’s version, as against the private respondent’s allegation that Benitez had acted as
agent in receiving the money and converted the same for her own use in
violation of the fiduciary relationship existing between her and private
respondent.  Private respondent
acknowledged the receipt of a xerox copy of TCT No.
9833 covering petitioner’s land in Dasmarinas, Cavite^[3],
and the check voucher issued by private respondent on April 16, 1983 showed
that the check for P500,000.00 was for “Payment for downpayment
of lot to be purchased”^[4]
and the check voucher dated August 27, 1983 for P500,000.00 was for
“Second payment for lot to be purchased.”^[5]

It was grave abuse of discretion on the part of respondent Judge Rosario
Veloso to deny petitioner’s Urgent Motion to
Discharge Writ of Preliminary Attachment, without conducting a hearing and
requiring the plaintiff to substantiate its allegation of fraud.  Neither can respondent Judge avoid deciding
the issue raised in petitioner’s urgent motion by ruling that “the issue
cannot be determined without adducing evidence at the same time going into the
merits of the case.” Having issued the writ of preliminary attachment ex
parte, it was incumbent on the respondent
court, upon proper challenge of its order, to determine whether or not the
same was improvidently issued.  A preliminary attachment is a rigorous remedy
which exposes the debtor to humiliation and annoyance, such that it should not
be abused to cause unnecessary prejudice and, if wrongfully issued on the basis
of false allegation, should at once be corrected.

We agree with petitioner that a writ of attachment may be
discharged pursuant to Section 13, Rule 57, without the necessity of filing a
cash deposit or counterbond.  The provisions of the aforesaid section
grants an aggrieved party relief from baseless and unjustifiable attachments
procured, among others, upon false allegations, without having to file any cash
deposit or counterbond.

WHEREFORE, in view of the foregoing, the appealed decision is hereby reversed and
the ex parte writ of preliminary
attachment issued by the respondent Regional Trial Court on December 11, 1984
is ANNULLED and SET ASIDE.  Costs against
private respondent.

SO ORDERED.

Melencio-Herrera, Paras,
Padilla, and Sarmiento,
JJ., concur.

^[1]  94 Phil. 15, 21.

^[2]
Filinvest Credit Corporation vs. Relova, 117 SCRA 420.

^[3]
Rollo, p. 82.

^[4]
Rollo, p. 101.

^[5]
Rollo, p. 97.